04 Jan 2012: Opinion

Solar Power Off the Grid: Energy Access for World’s Poor

More than a billion people worldwide lack access to electricity. The best way to bring it to them — while reducing greenhouse gas emissions — is to launch a global initiative to provide solar panels and other forms of distributed renewable power to poor villages and neighborhoods.

by carl pope

After the Durban talks last month, climate realists must face the reality that “shared sacrifice,” however necessary eventually, has proven a catastrophically bad starting point for global collaboration. Nations have already spent decades debating who was going to give up how much first in exchange for what. So we need to seek opportunities — arenas where there are advantages, not penalties, for those who first take action — both to achieve first-round emission reductions and to build trust and cooperation.

One of the major opportunities lies in providing energy access for the more than 1.2 billion people who don’t have electricity, most of whom, in business-as-usual scenarios, still won’t have it in 2030. These are the poorest people on the planet. Ironically, the world’s poorest can best afford the most sophisticated lighting — off-grid combinations of solar panels, power electronics, and LED lights. And this creates an opportunity for which the economics are compelling, the moral urgency profound, the development benefits enormous, and the potential leverage game changing.

As the accompanying graphs show, the cost of coal and copper — the ingredients of conventional grid power — are soaring. Meanwhile, the cost of solar panels and LEDs, the ingredients of distributed renewable power, are racing down even faster.

If we want the poor to benefit from electricity we cannot wait for the grid, and we cannot rely on fossil fuels. The International Energy Agency, historically a grid-centric, establishment voice, admits that half of those without electricity today will never be wired. The government of India estimates that two-thirds of its non-electrified households need distributed power.

Fortunately, the historic barriers to getting distributed renewable power to scale in poor villages and neighborhoods are rapidly being dismantled by progress in technology, finance, and business models. Getting 1.2 billion people local solar power they can afford is within grasp — if we only think about the problem in a different way. In fact, the world can finish this job by 2020.

The poor already pay for light. They pay for kerosene and candles. And they pay a lot. The poorest fifth of the world pays one-fifth of the world’s lighting bill — but receives only .1 percent of the lighting benefits. Over a decade, the average poor family spends $1,800 on energy expenditures. Replacing kerosene with a vastly superior 40 Wp (Watts peak) home solar system would cost only $300 and provide them not only light, but access to cell-phone charging, fans, computers, and even televisions.

Kerosene costs 25 to 30 percent of a family’s income — globally that amounts to $36 billion a year. The poor do not use kerosene because it is

Kerosene often costs 25 to 30 percent of a family’s income. Yet the poor must rely on this expensive, dirty fuel.

cheap — they are kept poor in significant part because they must rely on expensive, dirty kerosene.

And the poor pay in other ways. A room lit by kerosene typically can have concentrations of pollution 10 times safe levels. About 1.5 million people, mostly women, die of this pollution every year, in addition to those who die from burns in fires.

So why do the poor use kerosene? Because they can buy a single day’s worth in a bottle, if that is all they can afford. For the poor, affordability has three dimensions: total cost, up-front price, and payment flexibility. Solar power comes in a panel that will give ten, or even 20, years of light and power — but the poor cannot afford a ten-year investment up front. And many cannot handle conventional finance plans, which require fixed payments regardless of their income that month.

Nor, for the record, do the electrified middle class pay for electricity up front. When I moved into my house in San Francisco, I did not get a bill for my share of the power plants and transmission grid that give me power each month. I pay as I go, based on how many kwh’s I use that month.

So lighting the lives of 1.2 billion people with off-grid renewable electricity requires three ingredients:

Capital to pay for solar or other renewable electrical generation for 400 million households that depend on kerosene;

Business models for those households to pay for the electricity they use, at the price it really costs, which is a lot less than kerosene;

Financing, public policy, and partnerships to create the supply chains and distribution networks capable of getting distributed electrical systems to every household that needs them. (These needs might require $6 billion in credits and loan guarantees.)

The money is on the table. It’s just on the wrong plates. Purchase and finance of solar power for 1.2 billion people would cost about $10 billion a year over a decade. The 11 countries with the largest number of households without electricity spent $80 billion each year subsidizing fossil fuel — only 17 percent of which benefits the poor. In 2010, the World Bank spent $8 billion on coal-fired power plants, few of which provided meaningful energy access to the poor. The UN’s Clean Development Mechanism is proposing to give $4 billion a year to anything-but-clean coal-plants. So there is already far more capital in the system than is needed.

Even five years ago the business models did not exist to enable the poor to afford solar. Solar was much more expensive. The only alternative to buying a solar system with cash was a bank or micro-credit loan for which most of the poor could not qualify.

But the combination of dirt-cheap solar, the cell-phone revolution, and mobile phone banking has changed everything. There are almost 600 million cell-phone customers without electricity — using their phones very

Cell phone companies have a powerful motivation to get renewable power into rural areas.

little, still spending $10 billion to charge them in town. There are hundreds of thousands of rural, off-grid cell towers powered by diesel — at a price of about $0.70/kilowatt hour. All over the world cell-phone towers are being converted from diesel to hybrid renewable power sources. So cell phone companies have a powerful motivation to get renewable power into rural areas, to get electricity to their customers, and to charge for electricity through their mobile phone payment systems.

At least three commercial models have been launched in the last several months. India’s Simpa Networks — in partnership with SELCO in India and DT-Power in Ghana, India and Kenya — are testing models in which solar distributors can allow customers to pay for electricity through mobile banking “pay as you go” plans. Zimbabwe’s Econet Power has launched an even more intriguing model, in which it provides its cell-phone customers with solar power as a customer benefit, charging them only $1 week to use a home solar system provided by Econet, with the bills tied to the customer’s cell phone account.

UN Secretary General Ban Ki-moon has proclaimed 2012 the Year of Universal Energy Access. His initiative is keyed not to the UN climate talks, but to the Rio +20 Earth Summit talks scheduled for June.

Imagine that at Rio, instead of embracing business-as-usual solutions to energy access, the world decided to empower the poor with the electricity they can truly afford — distributed solar?

What would the benefits be? In carbon terms alone, kerosene for lighting emits almost as much greenhouse-gas pollution as the entire British economy. 1.5 million lives a year would be saved from respiratory ailments. The available income for the world’s poorest fifth would be increased by 25 to 30 percent — a pretty big development bang-for-the-buck. Numerous studies have shown that providing basic energy access increases household income by 50 percent or more by providing more time and opportunities for home-based income generation.

One idea promoted at the Durban talks was “climate-smart agriculture,” which could make crops less vulnerable to heat and drought and turn depleted soils into carbon sinks. The World Bank and African leaders back this approach, but critics are skeptical it will benefit small-scale African farmers.READ MORE

But the leverage is actually much greater. If one-fifth of the world is on solar, as these people prosper and can afford more electricity, they are going to expand solar systems, rather than turning to coal or nuclear. Their neighbors include the one-third of humanity with “spasmodic” electricity — wires that in rural areas work only at night, and in urban areas go down in the afternoon. These customers would find distributed solar far more reliable than the current grid. If we add those 2 billion to the 1.2 billion who are not on the grid, virtually half of humanity could be turning to renewable power as the cheapest, most reliable and most available form of energy. The fossil fuel interests would lose completely their current moral argument — that more carbon will power the poor.

That, I would argue is a phenomenal game-changer — and a powerful first step in building a trusting, low-carbon coalition of rich and poor nations. And that coalition could lay the groundwork for the more challenging global efforts that will be needed to stabilize and eventually restore the climate.

COMMENTS

Why not biodiesel generators?

Posted by
SWC
on 04 Jan 2012

You should have mentioned that as soon as somebody can afford to install solar panels, neighbours will turn up to charge their batteries and phones. That creates a local 'sneakergrid', without any copper, or issues due to dangerous high voltage. That will be a natural business model to get electricity to those that cannot afford solar panels, but can pay for a chargeable battery.

Posted by
Nichol
on 04 Jan 2012

Several issues:

1. Why argue based on copper, rather than aluminum prices? Al is much cheaper. http://www.infomine.com/chartsanddata/chartbuilder.aspx?z=f&g=127669&dr=15y

2. Solar power is not reliable, it depends on sunshine. When the sun does not shine, SPV provides less power, and even in southern countries, the sun don't shine at night. So, the people using it would need batteries as well to have power at night. That's a cost factor that has not been considered here.

3. Used Diesel generators are much, much cheaper than solar in the short-run. We are talking about desperately poor people here - would they really invest in something that may only pay off - if at all - after two decades, when the diesel generator will provide relatively cheap power quickly?

Posted by
dc
on 04 Jan 2012

Going off the grid would be tempting for many people, even here in Europe, just to get more independent and be sure of the origin of the electricity. But the question apart from the real environemental cost of solar panels is about batteries.

It is very nice to skip the pollution of kerosene but what about lead pollution if batteries are badly recycled ? I guess a field polluted by lead is nothing but a light issue.

Besides i have heard here and there in some talks that a set up including batteries and solar panel is not sparing any C02 emission, if one take into accounts emission during fabrication and recycling. Is it true ?

But what about the Edison battery that should be far less polluting and was discarded because of its weight and because of cheaper oil to power cars. Edison has shown that it could last nearly forever and could be thrown from several storey without leaking. Besides, it is easy to maintain, does not pollute (compared to lead batteries ....) and in fixed application weight is not really an issue.

I know these batteries are still produced in the China and imported in the US, but not in Europe.

Posted by
kervennic
on 04 Jan 2012

This comment is to the author: there is an orphan community in Columbia (Gaviotas) that has been producing solar panels as a means of support and social/environmental development...perhaps this is a group with whom you could communicate regarding your vision...

Bravo!

Posted by
nicole caputo
on 05 Jan 2012

Great article. For those of you who are interested in Simpa Networks, please check out this terrific 4-minute presentation by PopTech 2011 Social Innovation Fellow (and Simpa cofounder) Paul Needham:

http://poptech.org/popcasts/paul_needham_owning_electricity

It's well worth a watch!

Posted by
Andrew Zolli
on 05 Jan 2012

Full solar voltaic systems are generally outside of the possibility of poor "last mile" people. But there are partial solutions which can be inexpensive and extremely helpful. A solar lantern for instance can be had for about $50.00 that will give some light at night and as least as importantly in many case, will also charge a cell phone, which a lot of even poor people have these days. It may not be a everything someone wants or needs, but it is a lot when you have NO electricity and have to have your kids walk miles every couple of days to get your phone charged!

Posted by
Richard Fox
on 06 Jan 2012

Two organizations making this vision work are Solar Electric Light Fund and also Green Empowerment, whom I profiled for Orion magazine a few years ago. Their model is the most progressive, inspired, and responsive of the two, and combines social justice in the mix, hence the empowerment in their name:

http://www.greenempowerment.org

Their model is replicable by anyone and there's no limit to the amount of good it can do for rural people.

Posted by
Erik Hoffner
on 08 Jan 2012

For some time, I, have been thinking in terms of Off grid power to Indian villages.

The author of the piece has nearly covered all the points that I usually think of.

Yet I, feel that more can be done in order to provide power to those who are without power.

To that end I feel that off grid power, using solar energy has to be one of the many arrows in the quiver, especially in a country such as India. Where the rural areas have a heavy concentration of Bovine population.

They can use bio gas plants in addition to the Solar power plants. One providing electricity and the other providing cheap and green fuel. As the use of Bio Gas will not release any additional green house gases. Other then the ones already present in the atmosphere.

Posted by
Pratyush Ojha
on 09 Jan 2012

Great article and I completely agree. There is huge potential for solar to meet many of the energy needs of those living off the grid. Eight years ago, there were very few solar products
out there which were designed to meet the needs of rural African households and none that were really affordable.

All that has changed in the past 4 years, with some great quality, affordable solar units now
available. The challenge now is to get these out into the rural markets, build trust, strong brands and customer service. This is what we at SolarAid are focusing on - building market momentum through our social enterprise, SunnyMoney.

I believe we are on the cusp of a tipping point in Africa and that - with a cross sector effort - we
can eradicate the need for kerosene lights in Africa by the end of this decade.

Posted by
John Keane
on 10 Jan 2012

i entirely agree with the author. I suggest in addition of solar power, solar cooker may be introduced to reduce consumption fuel used in cooking stove.

Posted by
asesh lahiri
on 12 Jan 2012

"I suggest in addition of solar power, solar cooker may be introduced to reduce consumption fuel used in cooking stove. " I agree with this.

Posted by
mayadan
on 14 Jan 2012

Amazingly, here at Trees, Water & People, we are doing exactly what Carl has suggested. We are distributing "Clean Tech" products in Peru and Honduras to "last mile" residents who have no electricity. These are aimed specifically at providing an initial positive experience with low cost solar in the form of a phone charger and a single light. Once we work out the distribution aspects, we anticipate taking this to our other rural networks in Guatemala, El Salvador and Nicaragua and probably Haiti. It really is an amazing approach that can make a huge difference in people's lives while fundamentally changing the energy equation!

Posted by
Richard Fox
on 25 Jan 2012

The need especially of poor communities for sustainable, human-scale energy solutions cannot be talked about enough. Solutions are already available that could make a huge difference for billions of people.

Here is an article about the physics of solar cells:
http://www.science-niblets.org/technology/solar-powered-electricity.html

Posted by
Elmar
on 07 Feb 2012

Very well made arguments.

The point about reducing capital burden and focusing on pay-for-service models is well taken. Some models focusing on this have already started emerging in India. I will be talking about them on my blog, http://ideatingenergy.blogspot.com/.

Posted by
Ankit Kumar
on 06 Mar 2012

Solar, as well as other renewables like wind, biomass off the grid makes sense in developing countries.

Dr. A. Jagadeesh Nellore(AP),India

Posted by
Dr.A.Jagadeesh
on 13 Mar 2012

I don't see any serious response to the queries about the need for storage to run lights after sun set and for cloudy days. The cost mentioned of $7.50 per watt is presumably only for PV panel. What's the cost, including batteries and control equipment, for these pico setups?

Posted by
Michael Leane
on 10 Apr 2012

Comments have been closed on this feature.

ABOUT THE AUTHORCarl Pope, chairman and former executive director of the Sierra Club, has served on the boards for the National Clean Air Coalition, California Common Cause, and Public Interest Economics Inc. A regular contributor to the Huffington Post, he co-wrote the book Strategic Ignorance: Why the Bush Administration Is Recklessly Destroying a Century of Environmental Progress, which was published in 2004.MORE BY THIS AUTHOR

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